Fixed Ops Journal – February 2016 - (Page 26)

FIXED OPS JOURNAL " "We started with the retailers with the highest volume - and the ones growing the fastest - because they would give us the biggest bang for the buck." TOM DOLL, Subaru of America, on the FOX program Adding capacity to match sales gains S urging U.S. sales at Subaru of America Inc. and FCA US over the past several years have opened up opportunities for their dealerships' service departments - if those dealerships can handle the additional business. Subaru's U.S. new-vehicle sales are on track for their eighth straight record and ninth straight gain this year. Its sales more than tripled to 582,675 in 2015 from 187,208 in 2007. During that period, Subaru's market share climbed to 3.3 percent from 1.2 percent. FCA's sales, led by Jeep, more than doubled to 2,243,907 last year from 931,402 in 2009, the recessionary year when Chrysler Group declared bankruptcy. Both companies see meeting the service needs of all those additional vehicles on the road as a priority. Take care of those newly conquested customers, the automakers fig- ure, and they'll come back to buy again. Conversely, give them a poor service experience on the first cars they owned from this brand, and you've blown the chance to make a second sale. So both Subaru and FCA's Mopar operations are urging dealers to add the capacity to handle many more vehicles than they have previously. The following two stories look at those efforts. ■ ●●● ■ FCA-brands dealer taps software tool to gauge future service needs ■ Subaru signs up 40% of dealers for FOX program, mulls next phase James B. Treece Diana T. Kurylko rett Saslow, dealer principal at Smith Haven Chrysler-JeepDodge-Ram in St. James, N.Y., knew he needed to add service capacity. He was going to lose a half dozen off-site service bays when his lease ran out. About two years ago, he began talking with an architect about adding bays. In August, Fiat Chrysler sent him a new tool: Mopar Service Capacity Analyzer. Saslow ran the numbers. His conclusion: Add 31 bays, instead of "the low 20s" he had been considering. The software tool, offered to dealers free by FCA US, uses a dealership's existing service numbers, along with registration data that map active and inacSales soar tive customers within a geographic region, at FCA to paint a picture of the dealership's service U.S. SALES* operation. 2009 931,402 The dealer can change inputs - adding 2010 1,085,211 or subtracting technicians, changing techs to four 10-hour shifts, or adding service 2011 1,369,114 bays - to run a cost-benefit analysis. The 2012 1,651,787 analyzer also comes with a guidebook with 2013 1,800,368 instructions on how to switch to alterna2014 2,090,639 tive work schedules. 2015 2,243,907 "The cool part" about the analyzer, Saslow B S *Chrysler Group domestic brands plus Fiat, Alfa Romeo Source: Automotive News has been sizable," with Subaru spending Data Center between 25 and 30 percent more than it expected on the program. "It is well ahead of where we wanted to be. We started with the retailers with the highest volume - and the ones growing the fastest - because they would give us the biggest bang for the buck," Doll said. Dealers have until March to sign up but "we are not trying to push it because we feel we have enough coverage," he said. Not all dealers will have to participate in FOX, Doll said. Many dealers in the Sun Belt, where Subaru has been expanding its footprint, have newer stores "that are sized right," and they don't need to expand their service areas, he said. Updated service areas also are seen as a way to improve Subaru's low ratings in customer satisfaction surveys. Subaru was rated below average in last year's J.D. Power and Associates U.S. Customer Service Index Study. Ⅲ says, is "you could kind of pro-forma out, based on your sales, reasonable sales growth, retention" and other factors. "It put a science to it," whereas expansions typically involve "a certain amount of guesstimating." Even before getting the analyzer, many FCA dealers were adding service capacity. In 2015, FCA's U.S. dealerships added a net 620 service advisers and just more than 2,700 technicians to deal with the added volume from the automaker's increased sales. They also added the equivalent of almost 1,600 service bays, through new stalls, changes in hours and other steps. FCA US believes its Chrysler, Dodge, Jeep, Ram and Fiat dealerships need to add 5,000 service technicians, 1,200 service advisers and about 6,000 service bays by 2018 to keep up with growing consumer demand. Ⅲ Larry P. Vellequette contributed to this report. PAGE 26 FEBRUARY 2016 ubaru of America's program to increase service capacity 70 percent by 2018 is moving faster than expected, said Tom Doll, president of Subaru of America. About 40 percent of Subaru's U.S. dealers, representing 70 percent of the brand's annual sales volume, have signed up to expand their service operations under the Fixed Operations Expansion, or FOX, program. Subaru next will decide whether to launch phase II of the FOX program, said Doll, who declined to give a timetable. Subaru started the program with its large dealers. Those who began projects 18 months to two years ago will be finishing their expansions soon, Sales soar Doll said. at Subaru Two years ago, Subaru gave each U.S. U.S. SALES dealership a report with recommenda2009 216,652 tions based on projected growth. Subaru 2010 263,820 provides undisclosed financial support based on how much each store spends on 2011 266,989 service improvements such as additional 2012 336,441 lifts and bays, service technology, shop 2013 424,683 equipment and amenities. 2014 513,693 Doll wouldn't give a figure for the total 2015 582,675 outlay for the FOX program but said "it

Table of Contents for the Digital Edition of Fixed Ops Journal – February 2016

Editor’s Letter: Welcome to Fixed Ops Journal
Service Counter: Tracking fixed-ops numbers
Legal Lane: Court cases that affect you
Mobile mechanics: Do shop-free technicians threaten your business?
Mark Smith: A fixed-ops-focused dealer aims to change the industry
Adding capacity: Sales spur FCA, Subaru dealerships’ fixed-ops growth
Richard Truett: Toolmaker targets new techs
Designed for service: A look at a Minnesota dealership’s makeover
Weekend work: Service extends to Saturday, even Sunday
Tech exodus: How outdated policies worsen the tech shortage
Before Xtime: The origins of widely used scheduling software
Older parts: Toyota, Ford respond to older cars on the road
5 minutes with: Ford’s Toney, Toyota’s Laukes
Shop Talk: One question, multiple service directors
Fixed in Time: A look at service of yesteryear

Fixed Ops Journal – February 2016